by Thomas P. Healy
Indiana Rep. Bob Behning (R-91), a long-time advocate of education reform, authored House Enrolled Act 1641, which modified the state’s “Dollar Law.” Behning took time during a trip to China with Marian University students to comment on several elements of the legislation.
IMM: The law stipulates that if a charter acquires a property for $1 and subsequently sells it, a portion of the financial gain must be shared with the original seller.
Behning: “The fear is a charter takes a building for $1 and then four years down the road, decides they don’t want to operate and makes significant financial gain from the sale of the property. We want to make sure proceeds go back to taxpayers—minus the charter’s investment in the property.”
• The law requires a charter to provide proof of financial capacity and informed board leadership.
“We want to make sure there is an authorized charter with a board who is making a public decision to move forward understanding that when they assume this liability, they have to maintain and generate enough funds—hopefully through enrollment—to maintain and operate the property.”
• HEA 1641 creates two classes of unused buildings: small and large. For a large structure like Broad Ripple High School, the law requires that the charter school’s projected enrollment “at full growth will meet or exceed 60 percent of the largest enrollment on record for that building for the past 25 years.”
“What we decided to do is create two different classes. Generally, charters can assume operation and management of elementary schools because they’re smaller. The 60% only applies to buildings 200,000 square feet or more. We created a separate category because it would be difficult for another user to use such a large facility if they were never going to reach full enrollment.”
• However, if a charter school cannot meet the financial or enrollment tests, then the school district can sell property under IC-36-1-11 with the caveat that when it’s offered for redevelopment, the seller must insure that a charter school located within 1 mile is provided with the opportunity to lease “adequate facilities” on the redeveloped site at 50% or less of market rate—or a rate agreed upon by the parties.
“Most laws are not location-specific, so they are drafted to have statewide applicability. Frankly this was probably the most location-specific part of the legislation. I worked with Purdue and IPS on it. For instance, if a charter wants to locate in a specific location, say BRHS, and that facility was designed for a larger enrollment, IPS in this case can sell to the maximum bidder but part of the redevelopment has to include educational facilities on that same property. Whoever decides to build up there is going to have to include an educational component in it to get it zoned.
The way I see it working, Purdue is opening a charter school two doors down from BRHS. Purdue knows the current site won’t be adequate to its needs. A projected maximum cap of enrollment has been authorized so they know what they need capacity-wise. I would openly admit, yes, it may impair some of the value that IPS would get for the site, but I would also argue that if you poll the Broad Ripple community, you’ll find they want an educational facility on that property. We are trying to really hit what the community wanted and provide the charter an avenue to make sure that site was available and also make sure IPS had the ability to maximize their investment on that property.”
A version of this article appeared in the June/July 2019 print edition of the magazine.